Nigeria's Debt Load Is Increasing Under The Buhari Administration, Knocking On N80 Trillion Worth Of Doors

Nigerians are more worried than ever because the country's total debt has reached above N80 trillion.

Stakeholders believe that if nothing is done, Nigeria's economy will collapse and are in an emergency scenario.

Economic specialists have never remained silent, sounding the alarm despite the Debt Management Office's repeated denials of worries about Nigeria's rising debt profile.

According to DMO's Fourth Quarter 2022 report, Nigeria's overall debt is estimated to be around N46.25 trillion.

As of December 2022, the overall stock of domestic debt was N27.55 trillion, while the stock of overseas debt was N18.70 trillion (USD 41.69 billion).

The nation's external and internal wealth may have reached N80 trillion as a result of the recent borrowing binge by the federal government and the National Assembly's confirmation of the Central Bank of Nigeria's way-and-means advance to the federal government.

The nation's debt load had risen from N12.6 trillion at the start of President Muhammadu Buhari's administration in 2015 to over N80 trillion as the government gets ready to leave office on May 29.

It is clear that throughout the eight years Buhari was in office, borrowing to cover annual budget deficits became the norm. According to a study of statistics from the Debt Management Office, or DMO, the anticipated budget deficits in this country from 2015 to 2023 are estimated to be approximately N47.73 trillion.

Nigeria's budget deficit increased as a result, from N2.41 trillion in 2016 to N11.34 trillion in 2023, a 370.54 percent increase.

Right now, determining whether the nation is debt-trapped or debt-hooked is a semantic exercise.

The DMO is yet to reveal the debt figures as of March 31, 2023, according to Patience Oniha, the director-general of the organization said on Monday.

The DMO is yet to reveal the debt figures as of March 31, 2023, according to Patience Oniha, the director-general of the organization, who spoke to Daily Post on Monday.

She stated, "The figures as of March 31 have not been published."

The Chief Executive Officer of SD & D Capital Management, Mr. Idakolo Gbolade, however, lamented that the departing administration had been funding its budgets with loans since 2015.

In order to prevent a financial catastrophe, he urged the new administration to explore options for restructuring and negotiating the country's debt.

"The outgoing government has been financing the budget from loans since 2015 which gave rise to the unbearable loan position the country is now shouldering.

"We had continuously increased the debt stock even in the face of dwindling revenue. Major infrastructural projects executed or being executed do not have the capacity to repay the loans due to insecurity and wrong prioritisation of projects.

"Projects like the rail network are facing security challenges which have made them unable to generate adequate revenue. Other projects like roads are not commercially viable because they are not tolled.

"Investments in aviation have not also yielded enough revenue to service the loans used for its execution.

"In the face of insufficient revenue to service existing debt, the debt stock has increased to 77 trillion due to the securitization of the ways and means of the facility to the tune of N22.7 trillion.

"The debt situation in Nigeria is precarious and needs urgent intervention by the incoming government.

"The present indebtedness must be negotiated and repayment restructuring should be done to give breathing space for infrastructural development.

"The government should also look at Public Private sector initiatives on major projects as against financing mainly by additional loans", he said.

Prof. Godwin Oyedokun, a professor of accounting and financial development at Lead City University in Ibadan, also bemoaned the fact that the current administration had mortgaged Nigeria.

He believes that the Buhari administration's amount of debt is humiliating and frightening.

He said he wasn't sure how the rot would be handled by Bola Ahmed Tinubu's upcoming administration.

"The incoming government has a lot of debt to cope with. The good thing is that the incoming government is part of the outgoing government.

"This high debt profile means that we will continue to repay this from future earnings.

"Future earnings are surely not going to be sufficient to cope with the government's expenditure", he said

According to economists, the federal government should focus on equity financing rather than asset finance to alleviate its financial strain.